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Closing Bell

News/Business. Maria Bartiromo, Bill Griffeth. A guide through the most important hour of the Wall Street trading day. New. (CC) (Stereo)

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01:00:00

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San Francisco, CA, USA

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Comcast Cable

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Virtual Ch. 58 (CNBC)

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mpeg2video

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ac3

PIXEL WIDTH
528

PIXEL HEIGHT
480

TOPIC FREQUENCY

Us 19, Hp 12, Europe 8, Mark Hurd 7, New York 6, U.s. 5, Mike 4, Kayla 4, S&p 3, Justin 3, Herb 3, Hewlett-packard 3, Washington 3, Shaw 3, Bakers Union 2, Israel 2, Geico 2, Sharon Epperson 2, Charles Schwab 2, Hahaahahaha 2,
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  CNBC    Closing Bell    News/Business. Maria Bartiromo, Bill Griffeth. A guide  
   through the most important hour of the Wall Street trading day....  

    November 21, 2012
    3:00 - 4:00pm EST  

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flow and not adding capacity. >> that is very helpful. in the meantime, thank you for watching "street signs." we are off tomorrow for the holidays. have a very happy thanksgiving. >> "closing bell" is next. hi, everybody. we enter the final stretch. welcome to the "closing bell." i'm maria bartiromo at new york stock exchange. a cease fire in the middle east lighting a bit of a fire today for the stock market. >> a little bit. i'm bill griffeth. stocks are near the highs of the session. not assayisaying a lot. looks like yesterday's trashing is today's treasure as far as hewlett-packard goes. we're going find out why somebody here believes hp's troubles would not exist if they kept former ceo mark herd. >> take a look at markets today meanwhile. we have the rally in the dow jones industrial average, up
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about 0.3%. nasdaq composite also in positive territory to the tune of 9.5 points. s&p 500 higher by 2.25 points. fractional move there at 1379. meanwhile, cease fire between israel and hamas announced earlier today. we saw an immediate reaction in the market. take a look at this chart. the dow rallying as soon as the news hit the tape. >> we saw oil go down, as a matter of fact. things are coming back here. let's get to it with our next guests in today's close cl"clos" exchange. theoretically, the cease fire is an hour old. markets responded initially, but they've sort of regressed after that. you just saw the dow jones industrial average intraday. we saw a move to the upside.
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don't call it a super rally, but certainly definitive. the markets had been very nervous about whether the situation could eventually explode into something far bigger in the middle east. there's the intrasession for the dow as well. the news came along with secretary of state hillary clinton announcing that the egyptian foreign minister and the minute that happened, that's when we started to see the appreciation. again, we wanted to know this was not going to become something far wider in the middle east. we knew there was no oil at risk in this particular area, but we're very concerned about something wider. >> oil prices did go lower. they've since come back here, i guess, because this is merely a cease fire. >> not a lot of people are convinced it will necessarily hold. the toalty out of benjamin netanyahu maybe wasn't as positive as you would have wanted afterwards. >> are events like this out of our control, dictating how you
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allocate capital? >> well, they are. we're always looking at geopolitical risks. it does play a part in the global economy. with slow global growth domestically and overseas, the last thing we need is another geopolitical crisis. >> fiscal cliff taking a backseat today. how are you allocating capital today? >> we're very cautious now, frankly. we have about a two-week window. i think the markets are being a bit accommodating, frankly, until we get more clarity. >> rick santelli, did you see any movement in the markets when they announced the cease fire? it had very specific impacts here and there, but wasn't a widespread thing, was it? >> no, it really wasn't. as a i talk, you can look at ten-year for every major developed economy. the u.s., the germans, the french, the u.k., the japanese. month to date, the patterns are almost all die dent call. with all these variables, elections, mideast, fiscal cliff, it seems as though there's only so much flight to safety bid you can push into the
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marketplace. some traders say that's why you didn't notice. in the old days, it would make a difference. yields are already most accommodative from a nervousness standpoint. i will tell you it was the number one conversation. and even though it really isn't about oil, that's the market everybody is trading to of course kind of play the headlines. >> michael, how about you? how does this impact the way you're allocating capital? >> well, as you know, our strategy is about 45% in cash while the prefunctory -- what we'll have left to boost us higher. i think the market does go higher. here's why. you have $85 billion each month from the federal reserve as far as balance sheet expansion. you have negative real interest rates that will be getting even more negative. i expect inflation to take off significantly early in 2013. >> but if you're sitting on 45% cash, that says to me you're
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still expecting more downside here. don't you think we've already seen that? >> no, no, i don't. i think when everybody came out of that meeting in d.c. and shook hands and said we're going to find some kind of deal, that's what saved the market. if that doesn't lead to a deal by mid-december, i think we're going to see another huge leg down towards the end of the year. >> what are you buying right now? >> we think this is a buy opportunity. some of the dividend paying stocks and high yielders got hit pretty hard the last few weeks. we think it's a great opportunity with some great yields. bottom line, get paid to wait until there's more clarity. great yields out there. >> does that change if dividend taxes go much higher as it relates to the fiscal cliff? does the reason to own dividend payers go away? >> i think there will be a repricing of some of that risk, frankly. a lot of it depends on the tone coming out of d.c. there's not going to be a grand bargain this year. i think it's the tone and the message that we'll hear in the next couple weeks. >> meantime michelle, another area you cover carefully, the debt crisis in europe and
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whether or not greek gets this next trun j. >> headline, greece still needs money. they still haven't gotten it. the hope is they may get it on monday. that could be a potential destabilizing situation, but the bottom line is the only people they really owe the money to right now is the ecb. it's probably going get washed through. it's going to be a lot of drama, but you haven't seen the u.s. markets trade so much on it. we'd have to see them leaving the euro to get an impact. i'm not sure it would be that big an impact. >> you agree, rick santelli? >> i think greece is the canary in the coal mine with regard to the entire bailout mentality and how germany fits into it for a lot of southern countries in europe. i do think they will get their money. but i think the real issue is haircuts for the private sector. to me, this is going to be an interesting go of it. >> they already had their haircut. didn't we already have a 50% haircut? >> yes, now the germans are
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talking about new haircuts. yes, exactly. >> would you buy europe? >> i would. i think europe is very cheap now, frankly. even though the esm, i mean, it's got fire power. they have to sign up for austerity. we're a little concerned about that. no one is really willing to do that yet. i think europe looks very cheap on a valuation basis. >> very good. lady, gentlemen, thank you very joining us. safe trip home. >> thank you. >> happy thanksgiving. as we mentioned, oil prices higher -- well, they went lower after the gaza cease fire was announced, but they've since moved higher again. sharon epperson is here with details. >> a little confusing, bill. we did see oil prices below $87 a barrel for the u.s. oil price for the wti contract on the announcement there would be a cease fire. then also we saw brent crude prices fall below $110 a barrel. now they're making their way back. why is that? well, traders on the floor are telling me the same thing that white house officials are saying. that is that they're very
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cautious about this cease fire and whether or not it will hold. that is something that has not removed the geopolitical risk premium from this marketplace. when you think about the trading activity that will happen over the next several days, the fact that the trading floor is closed tomorrow, it will be a half day on friday, that the electronic trading will be at somewhat reduced hours. there's not going the same amount of liquidity. there's not going to be the same amount of participation. that will influence the trade too, perhaps. traders don't want to take any real bets. they don't want to be short this market. we're also looking at the fact that when you look at the week, the month, we're still higher for the price of crude oil. when you look at the premium of brent crude to wti crude futures at $23 plus, it lets you know there's still a great deal of geopolitical risk premium in this marketplace, even though here in this country we have ample supplies of crude oil. >> all right. thanks very much, sharon epperson. we're in the final stretch of trading here for the day. a market that is holding on to
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gains, up 51 points on the dow industrials with about 50 minutes before the closing bell sounds. >> that autonomy debacle just the latest black eye for hewlett-packard. this all could have been avoided if hp had not pushed out former ceo mark hurd over a sex scandal. the stock was up, as i mentioned, nearly 130% under his leadership. we'll look at both sides of that coming up. also coming up, remember this? >> if they do not report for work within 48 hours, they have forfeited their jobs and will be terminated. end of statement. >> ronald reagan fired all the air traffic controllers who walked off the job. should walmart workers who walk off the job on thanksgiving and black friday suffer the same fate? plus, remember the former hostess employee who was with us on monday who said his job was not worth saving? find out if he's angry that the head of the bakers union didn't bother attending the last-ditch mediation efforts yesterday. stay tuned.
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take a look at hewlett-packard today. making a slight comeback, up 2.5% after yesterday's double-digit loss.
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the debacle, of course, after the company announced an $8.8 billion write down to the ill advised autonomy acquisition. in the last year, the stock is down better than 50%. >> yeah, but we're not finished. since mark hurd was forced out as ceo due to what was deemed as an inappropriate relationship, that stock is down over 70%. the missteps for hp since then have been historic and costly for them, all of them famously covered on this program. in fact, we put together some of the low lights. take a look. >> we've got breaking news from hewlett-packard on mark hurd. we have to get right to john fortt. >> we are hearing that hp ceo mark hurd is resigning. >> we are covering a developing story here on the "closing bell," which just happened in the last 20 minutes or so. hewlett-packard naming a new ceo and president, leo. he's the former ceo of s.a.p. >> today hp unveils its new
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tablet computer. >> you had the news earlier this week the way their tablets were selling at best buy. you said, oh, my goodness, something is coming. when this news leaked, people said, man, those are not going to be good numbers. >> we saw the dow worsen when hp opened. we did get some news headlines out of the company. kayla. >> the company is in advanced talks with autonomy, of course, a large enterprise software company out of the u.k. >> yeah, it is confirmed. meg whitman is the new chief executive officer of hewlett-packard. she's also been named president. so it is confirmed, folks, after a drop of $20 a share this year. leo is out in less than a year. >> obviously, something has gone on here. you're talking about a $8.8 billion write down from hp. what do you think happened? >> i think there's been significant mismanagement of the company.
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>> why were you so loyal and you came to mark hurd's defense so quickly? >> what a spectacular job he did over that five-year period at hp. you can look at the results. it's a little like looking at the apple results. hp without mark hurd, hp with mark hurd, hp without mark hurd. >> and the stock just kept going lower there. >> it did. what a story. only two years, bill. so is larry ellison right? did it all go wrong since mark hurd was forced out? herb, you say the company did take a turn for the worst after mark hurd left. he was a better salesperson and better at execution. is that what you're saying? >> shaw. >> no, we think so. at the end of the day, they are selling commodity products, but there's nothing wrong with that. you just have to be run well. if you look at since then, they
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haven't been run well. we think that's an issue. also, having a strong sales force, strong personality in terms of convincing your own employees, this terms of convincing customers, we think those are things that are no longer there. we think, frankly, have made life difficult for hp. >> herb, you disagree. you think the company's problems were bigger than any ceo, right? >> absolutely. i'd go so far as so -- to say that under mark hurd, the company was an illusion. he was trying to please wall street. look at the revenue growth. most of it was through acquisitions. remember eds? then you have a situation where he was slicing and dicing. an important metric that wall street watched wasn't gross margin, which wasn't doing much. what wall street watched was the operating margin. the operating margin was going up, but it was going up at the expense of cutting the muscle
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out of the company. >> you're nodding your head, shaw. you agree? >> well, you know, some aspects of it i agree. in terms of the secular pressures that they're facing in pcs and printers, that's not different. when you have a low-cost structure, you're able to compete in the marketplace more erve effectively. that's what mark hurd offered. i disagree with the growth. if you look at their server business, pc business, they're growing under mark hurd. they're growing high single digit, low double digit. now they're declining. >> the eds deal, that's important to bring up, herb. that was called expensive. the deal was not looked at positively by analysts. what are you going say about the stock price performance, herb? i mean, under mark hurd, that stock soared. he leaves, the sympttock plumme.
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>> it soared because he was trying to do what wall street wanted rather than what was good for the company. what tech company cuts rnd? he was cutting rnd left and right. what was he trying to create out of this company? what happened to eds? i wouldn't say that was great deal in retrospect. so, look, he knew how to pull the levers. but he was really fighting a very difficult fight and on the surface it looked great. >> what about that, shaw? rnd, that is very important. any technology company that wants to continue to grow. >> i don't have my model in front of me, but the rnd cards actually weren't that significant. i believe they cut it maybe like 10% or 15% at most. but what really caused the earnings growth was actually top line growth. that's how they're able to beat numbers. that's why the stock went up. they were delivering products that customers actually wanted to buy, right? that really was the key difference. >> i remember doing stories on
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this going back and looking at tracking the eps growth and tracking the earnings growth relative to the rnd slide and watching where the earnings growth and margin growth was coming from. when you take a look at the revenue growth and the top line, shaw, how much was that coming from acquisitions? how have those acquisitions all panned out for this company before the secular change in the technology it now has? >> well, i would say, like, roughly about half, you know. probably one-third to half came from acquisitions. the rest was organic. as a i said earlier, when you have a competitive cost structure where, you know, it gives you more room to price competitively, it also gives the sales force more confidence that they can price more aggressively without hurting margins, right. that's really the key. at the end of the day, i don't disagree that they sell commodity products, right. but selling commodity products can be very lucrative. you look at companies that sell hamburger, detergent, whatever. you know, the difference between
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the companies is the ones that execute well and the ones that don't execute. we felt that the key difference with hp right now is they're just not executing. they need a guy, they need a person, excuse me, could be a gal, that could really focus on execution. >> and integration. >> that's correct. >> i got to tell you, i think this is one of those broken stocks that's going to remain broken. >> well, i'm thinking a lot of hp shareholders were wishing that they had hamburgers to sell like mcdonald's because that stock has done much better. thank you both for your thoughts today. see you later. take care. all right. 40 minutes left. the dow hovering with a gain of about 54 points. we're hanging on here. >> meanwhile, some workers at walmart and target are planning to walk off the job on thanksgiving and black friday. will they be fired, and will the controversy hurt sales? also ahead, which retailers are going to see the biggest black friday boom or bust? we have it all covered for you
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coming up later on the "closing bell." ♪ [ female announcer ] today, it's not just about who lives in the white house, it's about who lives in the yellow house, the green, and the apartment house, too. today we not only honor the oval office, but we honor the cubicle, and the home office as well. because today it's about all of us. and no matter who you are, you're the commander-in-chief of your own life. ♪
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welcome back. retail's big day is coming early. forget black friday. some stores including walmart, target, and a lot of others are
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opening their doors tomorrow night on thanksgiving, right after that turkey dinner. that's causing some controversy with workers threatening a walkout. it could also boost sales. so should you buy either retailer? we're doing talking numbers here. carter worth is on the technical side. on the fundamentals, patty edwards. good to see you both. carter, what do the charts tell you right now? >> sure, well, these are highly correlated assets if you look at any long-term time frame there. they're almost like railroad tracks. the key is the here and now. if you look at target, it's a well-defined up trend over the last year and a gentle, orderly pullback to that trend. target has just broken out from multiple tops at the 60 level and now having fallen back to that level has a lot of potential for upside surprise. walmart has been euphoric. it was up, up, and away earlier this year to the point where it took out its 1999 highs.
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and now it is under extreme pressure p the stock, in fact, is underperforming both the market and target. that really is the issue from our point of view. we like target better here. >> you want to buy target. you want to stay away from walmart? >> correct. >> patty, what about the fundamental case? >> the fundamental case is almost exactly the opposite. walmart has come down 11%. these two stocks are trading at the exact same multiple of next year's earnings. yet, you've got greater earnings growth out of walmart. on top of that, target has head winds in the near future because they're going into canada. i will tell you from the experience that folks at costco had, going into canada is not as easy as a you might think, even though from here it's only 150 miles away. you have sales baked in from walmart because of layaway. that's been hugely popular. that's about $300 million in sea sales booked this year that wasn't booked last year. on top of that, they're the
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low-cost leader. in the short run for a trade, you want to be in walmart. long-term, i love target, but i think wall marmart is the bette today. >> these stocks have the same growth rate, the same r.o.e. right now, people are selling walmart. it dropped and gapped on its earnings. it's underperforming in the market, down 10% in a month. if there's wisdom in prison pri -- price, and there is, one is quite a bit better than the other, and it's target. >> i absolutely disagree on that one. walmart, you have a short-term pop here where it's gone to the downside. you look at the longer term, you look at the sales growth out of international, which they will get fixed, and it's 28% of sales where target doesn't that have. there's something to be said for walmart here. >> all right. we'll be watching both those stocks. thanks for your insights. see you soon, guys. coming up, the walmart walkout. somebody here says any workers
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that walk off the job on thanksgiving, the busiest day of black friday, should be fired on the spot. the discussion coming up. stay with us. bill, over to you. as we head toward the close, about 30 minutes left before turkey day. when we come back y didn't the union boss for the hostess workers show up for yesterday's court ordered mediation talks. we're going to look for some answers as the fate of that company now looks very bleak. and of course americans getting ready for their turkey comas after their big thanksgiving meal, but they won't get just indigestion. we're going to get sticker shock by how much thanksgiving weekend is going to cost this year. we'll have details on that coming up. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer.
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welcome back. take a look at the marks here. the dow jones industrial average up 42 points. that's 0.3%. a pretty steady trade today and light volume ahead of the markets closed tomorrow for the thanksgiving holiday and an early close on friday. the s&p 500 up 1.7 points. >> we have a headline telling us
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that the judge in the hostess case has now okayed the liquidation. they're going to be able to launch the liquidation of this case. the judge ruling on that. waiting for more confirmation. kayla is working the story. as you know, yesterday the union went back to mediated talks with the company to try and work something out. the judge was urging them to do that to try and save the 18,500 jobs that were on the line in this issue. but they came back empty handed when that hearing began at 11:00 a.m. eastern time this morning and now the judge is green lighting the liquidation of hostess, which is what the company was after at this point anyway. >> the wind down plan. kayla is right outside the bankruptcy court in white plains. as soon as we have more details, we'll get right to kayla and give you a sense of what's going on. meanwhile, the bakers union chief was not present at the last-ditch mediation efforts yesterday. joining us is the bakers union
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member mike. he worked at a wonder bread factory. also with us is justin wilson, from the center for union facts. good to see you both. thanks for joining us. why wouldn't the head of the union go to the mediation that a judge ordered? >> well, i love the framing of this. like he didn't go for some particular relevant reason. the fact is that they announced that they were going to have mediation, and -- >> but i mean, there was an order and he didn't go. so why didn't he go? >> right. the meeting was in the morning, i believe. you have to get there first. he's always over the country doing stuff. not that it even matters. the fact is that -- >> is there anything more important than this? the company's liquidating now. i know he's all over the country, but is there anything more important than this on this day? >> there are lots of things more important than that mediation meeting, yes. >> oh, okay. >> the fact is you can't negotiate with terrorists. if these people are going to
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steal our pension, and that's what mediation is for, then, you know, that's not on the table for me. i'm sorry. >> michael -- >> as far as frank not being there -- >> all right. that's sort of a side story. i get what you're saying there. when you were with us on monday, you made it clear that you felt the job being offered to you was not worth taking. you'd rather take the unemployment, which you feel you'd get more money from than ul you would from this job. now that the company has been green lighted to liquidate, what happens to your job? your union bosses have said they're convinced you will make wonder bread again if this brand is bought by somebody else. what do you expect to happen? >> i expect to make wonder bread with my union brothers and sisters again, yes, i do. i believe frank has handled this excellently. he's done what we asked him to do as a membership. the fact is that he wasn't at that meeting and nobody cares because all of the other ranking union members were at that
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meeting. i mean, the fact that he wasn't able to attend is really like -- i mean, this is a nonpoint. >> it wwas it a message, you kn to the bosses at the company? >> no -- >> look, i'm not showing p inin. justin, what about you? what's your take? >> it's insulting. it's a clear indication he had no interest in actually settling this. we have airplanes for a reason. if i were him, i would have been on the first plane to get to that meeting if only to show i actually cared about these jobs. he was willing to walk 18,000 jobs off the cliff in order to save the rest of his industry, or at least trying to stop any future concessions from being made. but what's really wrong here is that, you know, just because a few of these union employees who actually wanted to go on strike decided to, they walked off the cliff with, you know, 18,000 other people who are not going to have a job on monday. if they wanted one, they could have done something about it.
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>> justin, isn't it possible that the company wasn't going to go into these talks yesterday with anymore good faith than the union did because both sides had nothing to gain by going back to work again? the company wanted to liquidate because they feel the parts are worth more than the sum and the union didn't feel they had a good enough deal on the table to go back to work. so nobody wanted to go back to work. don't you think that's possible? >> it's clear the company and teamsters union that represents the major of those employees wanted to create a deal. they would not have been trying since early 2012. the union is basically giving any potential future investor in this company a lot of reasons to not purchase it in anything other than a full liquidation. you're an investor, would you want to inherit this as your union negotiator? absolutely not. >> what about that, mike? you said you're going to keep making wonder bread. there aren't any takers. >> that's not true. there are lots of officer out there. they are negotiating all the time for new offers.
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>> isn't it possible you'll go back to work as a nonunion worker, though? >> it is possible. we'll find out. i will go back to work if the opportunity is in front of me. we went over this monday. it would be if it was the right company trying to do the right thing. these current owners that we have are not bakers. they are not -- it they don't wake up in the morning and say, how can we make a better quality product more efficiently? they say, how can we strip the union of their rights, and how can we sell off the individual brands like butternut and dolly madison and drake cake and all those individually without the union responsibilities? that is what they're trying to do. >> the union liability that's been creating with these brands, they have no interest in breaking up a this company, but there's economic realities that they have to face. they have 340 -- >> that's not true. >> there's 340 different collective bargaining agreements. they're invested in more than 40-run union pension funds that
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are all in the red. they have an enormous liability -- >> the company doesn't pay their share. >> when you have liabilities like that and you have no one who's willing to invest in a company, at some point, the union has to take a little bit of the blame. this union has such arrogance. they just want to blame capitalists. >> what if that's not arrogant? what if that's the fact? the fact is -- >> the union will take absolutely no responsibility for the role its played in this. >> that's not true. you don't even know the rule of the union in all of this. >> we want to bring kayla into the conversation. >> she's outside the courthouse there. >> she's got the headlines on this liquidation. go ahead, kayla. over to you. >> reporter: maria, a bankruptcy court judge here in white plains, new york, has approved the wind down plan submitted by hostess brands today. the one thing that is conditional is that employee retention plans as well as management incentives will be
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subject to final approval next thursday. but apart from that, almost every single part of the plan submitted by hostess was approved. they will be eliminating 15,000 jobs, cutting down from 18,500 to 3200. management will stay in place. there had been a motion to change this from a chapter 11 bankruptcy to a chapter 7 bankruptcy since they were liquidating, that changed things. the judge held up the chapter 11 saying the current management has done a good job. the judge here in white plains actually ended his statements by saying he was very impressed with the current management and they're obviously separate from the previous management that did not run the company correctly. he also praised both union and nonunion employees saying they did a good job as well. that's the latest here from bankruptcy court in white plains. >> all right, kayla. thank you very much. >> thank you, kayla. >> mike, what do you think of what you heard there? the judge impressed with management and with the union
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and nonunionized workers here. he feels like everybody was trying to do their part to keep this company together. >> still, look at all the job losses. >> well, frankly, i don't consider my job lost yet. someone is going to purchase wonder bread, and they are going to continue to make wonder bread. >> you're not going to have a paycheck on monday. >> i haven't had a paycheck in two weeks. >> you're not going to have a paycheck though for months. the thing is, you seem to be perfectly fine with this. but because you're pro union, a small group of employees that are pro union -- >> i'm actually pro me. >> one at a time, guys. >> to be fair, the trouble with american labor laws is that a small cad ray of pro union employees were able to sink an entire company where you've got tens of thousands or at least 10,000 employees who had absolutely no want or wish to see this happen. there's 7,500 teamsters willing to take these concessions and keep their job. look at it this way. there's no rational actor that would tell you a job on monday
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at slightly reduced wages is better than no job at all. >> what about that, mike? >> where does slightly reduced come in? what does that mean? no, it's 27% over five years. >> you could have looked for another job. if you didn't want the job, that's fine. there's other people that need money this holiday season. >> they were stealing my pension at the same time. >> but look what happened now. >> yeah, you're going to have nothing. >> mike, the assumption we're making is that when you get a job back, if you get your job back with wonder bread, it's a nonunion job and therefore you'll probably get fewer benefits. -- >> i don't know why uld make such a silly assumption that i would be a nonunion baker. liquidation means they're selling. we don't know who's going to buy yet.
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>> wait a minute. if anybody's going to buy this company, why would they pay more in wages than they would have otherwise? it makes no sense. ch . >> it's not going to happen. >> you're jumping to concludes. the fact is that if you're a real bakery, if you're a company purchasing us because you want to have a quality product produced in the safest food processing plants you could ever be with at with trained and experienced workers, you would go union. there are actually plenty of pyres talking about it. >> even though we saw what just happened. guys, let's watch the story. come back, though. we want to continue this discussion. >> we're not done yet. >> justin, mike, thanks so much. we appreciate it. wow. what a story. >> a contentious story. all right. heading toward the close. the dow holding steady with a gain of 45 points. >> stocks higher for the third time in four sessions despite no deal on the fiscal cliff. should you be buying or take to
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another busy news day. markets higher right now. we had the cease fire now announced between israel and hamas. if there isn't peace in washington on avoiding a fiscal cliff, will these gains go away in a hurry? >> joining us now, rich bernstein, cnbc contributor, anthony chan, and our own bob posani. bob, so far we've seen, what, trade on two things, right? the middle east and fiscal cliff this week. make sense of it. >> right now this week shows we're up 2% right across the board. we're in the honeymoon period between congress and wall street about fiscal cliff. they think a deal can be done. most of the traders feel we've got until about the week of december 10th to show progress. after that, markets will start turning south. congress holds the keys to a good part of the gdp next year.
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if we get a decent deal on the fiscal cliff, a moderate agreement, we'll be at 2, 2.5% gdp growth. if we go over the fiscal cliff, we go probably 0% gdp growth and i'm sure that earnings will go negative. think about it. >> i think there's no question that if the federal reserve can't sort of make the economy grow fast we are about a 1% negative head wind, you go off the cliff. it's all over. the economy goes into a recession. no question. >> you're hanging your hat on monetary policy, not fiscal policy. >> i'm hanging my hat on both, but monetary policy, and i heard ben bernanke yesterday. you're not going to be able to offset a 4.3% negative head wind. monetary policy is important. >> anthony and bob make good points. we all talk about uncertainty. corporations have to deal with uncertainty all the time. it's a question of how do you forecast? the problem is with washington there's nothing fundamental here. it's all emotional.
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that's the big uncertainty. if we can solve that problem, i think we're on the way. >> but can we solve it? >> i think we can. i actually think the fiscal cliff -- they won't solve all the problems, but the fiscal cliff will turn out to be more like a ditch. if they can solve most of the problems, i think the markets are okay. >> got some clapping going on here. >> the applause it for the marines. they have hit the new york stock exchange. it's an annual tradition. >> once a marine, always a marine. >> they will be here ringing the closing bell to kick off the annual toys for tots campaign. and there's a famous bell ringer himself joining us here at the new york stock exchange. of course, the marines and all of the armed forces always get a big hand when they come to the floor of the new york stock exchange. we're very glad they're with us today. what are you going to buy here? do you feel we've seen the lows for the year here? >> i think that right now the market's realized we're going through some sort of a brush fire. if we go past the end of the year and we have nothing and no
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prospects, then i think we have to worry about the forest. right now it's one of cautious optimism. >> but you have to operate your business regardless. so what do you want to do going into year end? we still have no clarity in terms of where tax rates will be on dividends, where tax rates will be on capital gains. >> i think there is some clarity around the world in terms of things not going well. we think about europe. clearly there's clarity about the negative things going on in europe. in japan, there's clarity on the negative things. japan just announced their first current account deficit in like 16, 17, 18 years. i think it's important for investors to remember that things, am though we're uncertain here, the fundamental backdrop is reasonably good. washington can ruin that, but unlike what you're seeing around the world, the fundamental backup is reasonably good here. >> the problem i have with this, richard, is 2% growth gdp in the united states may be -- and i'm
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talking 2013. maybe 8% in china. flat, if we're lucky, this europe. i think if the u.s. doesn't show some leadership here, that could make a huge difference. some leadership on the fiscal cliff means we could do maybe 3% gdp in 2013 and if you go the other way, if you just abdicate completely, we could go to 0% gdp. there's a lot at stake right now. >> gentlemen, got to go at this point. thank you for joining us. happy turkey day. anthony, see you later. >> thank you so much, guys. ten minutes before the closing bell sounds for the day. a market up about 50 points on the dow industrials. >> inflation nation. you may get indigestion when you see how much it's going to cost you to celebrate thanksgiving this year. that's coming up next. and as if the higher cost of your turkey dinner wasn't bad enough, the holiday travel is getting pretty ugly out there. you can blame superstorm sandy for part of it. the story next.
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before you start this thanksgiving holiday, you might be surprised and shocked and dismayed to see how much everything is going to cost compared to last year, for
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example. so if you drive to grandma's house, aaa says a gallon of regular unleaded gasoline is going to run you 8 cents more this year than last year. >> if you're flying this weekend, in addition to make crowds, you're also be paying an average of $22 more per ticket versus last thanksgiving. >> ouch. of course, nothing says thanksgiving like a turkey. but get ready. the american farm bureau says you're going to fork over an extra 66 cents for a 16-pounder this year. that doesn't sound like a lot, but think about this. 50 years ago, you weren't around, a 16-pound turkey cost you only $6.24. >> but don't worry. we found two things your wallet can be thankful for. first, whipping cream. the price of whipping cream saw the biggest decline of any thanksgiving food item. falling 6.6% from last year. >> that means demand is going down. another drop in price, movie
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tickets. >> that's good news. >> isn't this interesting? if you head to the theater after your turkey and whipping cream, you'll save 16 cents per ticket on average according to the national association of theater owners. the average ticket price in the country, $7.78. >> wow. that may actually send me to the movies. >> you'll pay more. i guarantee you'll pay more than that in new york. but, yes, go see the bond movie. >> i know for a fact it's about $10. >> it's a little more than that right now. >> is it? more than $10? $12? >> more than that. >> keep going? whoa. $20? >> not that much. you're getting higher. we'll continue with name that price in just a moment. we have you are closing countdown. we may have the hostess ceo next as well. stay with us for this as we continue following the now liquidation efforts by hostess on the heels of that judge ruling. so stay with us for the ceo of hostess. ready, set, shop, meanwhile. con sierms getting ready to race into the stores thanksgiving night. we'll tell you which retailers
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will ring up the biggest sales. >> plus, what should happen to workers who walk off the job during walmart's black friday event or thanksgiving night? we'll hear from somebody who says they should be fired. you're watching cnbc, first in business worldwide. [ male announcer ] this december, remember -- what starts with adding a friend...
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let's build a strong foundation. let's invest in our teachers so they can inspire our students. let's solve this. he loves risk. but whether he's climbing everest, scuba diving the great barrier reef with sharks, or jumping into the market, he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees. so he can worry about other things, like what the market is doing and being ready, no matter what happens, which isn't rocket science. it's just common sense, from td ameritrade. okay. couple minutes before the close. stay tuned because in moments maria will be talking to greg rayburn, the ceo of hostess.
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they just got the green light from the judge to liquidate the company. we want to hear from him directly. that's coming up in a moment. after the market closes and as we go out, we're heading toward the highs of the day. the dow up 42 points. let me show you the gainers and losers among the dow components. best performer today, hewlett-packard. do you love this market or what? after that huge decline yesterday. dupont near a 52-week low. the sectors, technology leading the way. didn't get much help from apple, which was up about $1 today. then you have the risk-on trade that are doing well. energy, industrial, and telecom leading the way here. allen, what do you think of this market going into the week here? there doesn't seem to be a sense of urgency. we're just marking time waiting for the fiscal cliff. >> we sure are. very light day. volume very light. we're stuck at 1390 level on the s&p. the internals are good. for every two stocks that fell, three have gained. traditionally, the short day on friday, we almost have a little rally. >> you likely to continue to
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buy? >> yeah, we'll continue to buy. >> you're not skeptical? >> not real skeptical. especially in the short term. the president comes back next week. congress back next week. they've been talking to each other. that will help the rally. >> anthony, what are you going to buy? >> i think international stocks, i think chinese equities are very exciting in this kind of environment. i even think the u.s. economy is getting cheaper. this big reduction is making it a little more exciting. >> it can be health care versus defense stocks. you know, one way or the other depending on the fiscal cliff. you ready to buy either of those? >> i think at this point, if you go over the fiscal cliff, those sectors will be very exciting. one area that i'm really looking at is cyclical versus defensive. i like the cyclicals. >> all right, gentlemen. thank you very much. it's the 65th anniversary for the toys for tots campaign by the m

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